Finding common ground: Planned Giving
Officers & Financial Advisors
Presented
by:
2012
William Sutton, Jr.
Head of Philanthropic Services, US
UBS
Section One
Why are Financials Service Firms “Into” Philanthropy
The Business of Philanthropic Services
Why are Financial Services Firms “in” philanthropy
Change Firms
Designate Advisor
Wealth
Transfer
90
53
6
percent
percent
Trillion
Evolving client needs…
…firms are moving beyond investment advice
98%
98%
Of clients give
annually
Philanthropy is a top
client priority
Advice
?
No consistent source
2
Endowment & Foundation Services – The Opportunity
Endowment & Foundation assets in the US
U.S. Market Opportunity
• $2.56 Trillion AUM and over 1,000,000 public charities
• 64% of HNW clients serve on non-profit boards
Retirement
Accounts
Cash
Management
Securities Backed
Lending
Business Opportunity
Endowments &
Foundations
Charitable
Trusts
Charitable Gift
Annuity and Donor
Advised Fund
3
Focus on more than asset management
4
UBS Philanthropic Services: a global presence
We provide you with expertise and solutions to deliver positive change
Philanthropic Team
UBS commitment to philanthropy goes back many years. Our team covers over 30 dedicated experts globally and we look back
at over 10 years of successful hands-on experience with our in-house foundation, engaging in over 70 countries worldwide.
Paris
Zurich / Geneva
New York
Atlanta
Hong Kong
Singapore
Headquarters
Sydney
6 regional offices
Projects & Initiatives
UBS Optimus Foundation
5
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UBS Philanthropic Services: A Local and Global Presence
Providing unique knowledge exchange, administration investment and peershare services
UBS Philanthropic Services:
Recent UBS Philanthropy Events:
• Works with over 20,000
charities across the U.S.
and thousands more
globally1
• UBS Global Philanthropic Forums and
Roundtables
• Serves 3,500 private
foundations in the U.S.
• Selected Best Global
Philanthropy Services2
• Over $50 Billion Managed
and Advised Philanthropic
Assets in the U.S. alone
• Services for private
foundations, donor advised
funds, charitable trusts,
endowments and
foundations
1
2
National Center for Charitable Statistics
Euromoney Private Banking Survey, 2012for the year 2011
• UBS Optimus Foundation
• Next Generation: Philanthropy –
Singapore, Zurich and New York
• Visionaris Social Entrepreneurship Award
in Latin America: UBS & Ashoka
• UBS US Philanthropic Roundtables
• Q Series on Sustainable Investing
• Mission Related Investing Roundtables
• Family Office Forum
• Coaching Roundtables: Customized
training and peer sessions for
Endowment and Foundation Leadership
1
Best Philanthropy
Services in the
World
Euromoney 2012
6
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Benefits of Charitable Planning
Charitable planning brings life to client’s values and supports the community, and
also benefits financial advisors
Uncover more assets
- Assessing a client’s charitable goals may uncover assets held away
Increase revenue
- Charitable planning may lead to solutions such as life insurance, donor
advised funds and trust services
Build relationships across
- Conversations may lead to relationships with client’s heirs and their
multiple generations
friends who share their causes
Develop strong referral
sources
- Establish productive relationships with your client’s other advisors
Insulate your client
relationships
- Addressing charitable planning positions you to maintain control and
coordination over all aspects of your client’s financial life
- Successfully helping clients address some of their most personal needs
enhances their trust and confidence in you
Source: UBS; From Planning to Action, Delivering Wealth Management Advice – Charitable Planning; 2012
7
Why are financial Services firms “in” Philanthropy
The Lucky 9%
Talk About Planning
Real Conversations
The Lucky 9%
Active Philanthropy
8
Section Two
The Landscape
Recent Charitable Trends
The Landscape
Research - History
•1990s: TPI’s series of professional advisor surveys
•Financial Advisor philanthropic dialogue with clients:
•intermittent
•focused on estate planning not philanthropy goals
•In 1999, Schervish and Havens document $41 trillion intergenerational asset shift
•By 2004, TPI reflects shift in advisor practices on talking about philanthropy with clients
•80% discussed philanthropy with clients
•38% said “very important”
•75% said “good for business”
•8% reported such discussions “generated revenue”
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
10
Philanthropic Landscape:
Recent History: Americans donated $298 Billion in 2011
Giving USA Foundation 2008
Section Three
The Pew Charitable Trust Survey of Financial Advisors
What are the top three concerns of your existing client base?
Insight
Outliving assets and not having enough
for retirement
Transferring wealth effectively and efficiently
(i.e., multigenerational planning)
Volatile markets (i.e., short-term market
problems and the economy)
Tax minimization
Asset preservation
Philanthropic effectiveness
Teaching heirs to use wealth
responsibly
Bringing children into the family’s philanthropy
•
•
22
Recent Charitable Trends
What is the greatest challenge to addressing your client’s philanthropic needs?
What do advisor’s need?
•Lack of advisor expertise in philanthropic planning: “I need to learn the topic more.”
•Financial insecurity: “Market conditions have clients concerned that they will not have enough
to support family needs over the long term.”
•Lack of company-provided product: “My company does not have a donor-advised fund.”
•Lack of client direction: “Most people have a vague idea of being charitable, but no clue what
they really want to do.”
•One advisor was clear that training was needed on the “softer skills.”
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
23
Recent Charitable Trends
Addressing your client’s philanthropic needs
Dow at 14,000
“Education, Education
Education”
Tools and Resources
Access to Philanthropy Experts
More forums to share
experiences and exchange
ideas
Deeper training in estate
planning and immediate tax
benefits
Discussion on philanthropic
strategy – not selling a product
Turn key solutions
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
24
Recent Charitable Trends
Survey Takeaway: Amplifying the Philanthropic Dialogue
Philanthropy is being talked about more than ever within financial services firms and
among advisors and their clients.
80% report that their firms discuss philanthropy as a client service more often
90% indicate that their firms are marketing philanthropic planning services.
More advisors are asking their clients about philanthropic planning interests
63% report that their clients are talking more about philanthropy
93% believe that the aging baby boomer population will create a greater need for
philanthropic planning services
91% of advisors believe that being able to address philanthropic needs would help
differentiate themselves in the eyes of existing and would-be clients
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
25
Section Four
Practical Opportunities
Recent Charitable Trends
Selective Partnership
The “Right” Advisor
•10 plus years in the business
•Serves on nonprofit boards
•Practices “holistic wealth management”
•Embraces financial planning
•Open to partnership
•They talk to (not through) the spouse/partner
•They know which charities their clients support and why
•Philanthropic Financial Planning
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
27
Recent Charitable Trends
Understanding the Advisor
Compensation and Competition: friction and frank conversations
•Commission/Salary Bonus or Recognition
•Donations, Wills and Trusts: Assets leave the firm
•Overpromising Development Director
•“Why would I ever introduce you to my best client”
•It’s not you, it’s me
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
28
Recent Charitable Trends
Understanding the Advisor, cont.
Hurdles to charitable planning
•Advisor and Comfort Discomfort
•Perceived client disinterest
•Speaking to the wrong client
•Infrequent meetings/limited time
•Short term relationships
•Conflict avoidance: transactional planning is easier
•Lack of competence
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
29
Recent Charitable Trends
You might need to adapt
Avoiding Friction and the new reality
•Donor/Client life events vs. nonprofit fundraising schedule
•Bequests: Discuss with Advisors
•Client and Advisor “control” – assets managed
•Commercial Donor Advised Funds: Fidelity, Calvert/Impact, UBS, Comerica
•Community Foundations: KC and Atlanta
•Restricted endowment assets
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
30
Philanthropic Conversation
Charitable Giving: Who starts the conversation?
Client Initiated
Advisor Initiated
Attorney
93%
7%
Accountant
90%
10%
Financial Advisor
80%
20%
Bank/Trust
68%
32%
Nonprofit
48%
52%
31
Philanthropic Planning
Nonprofit assistance: Help close the 80/20 gap
Marketing materials: tools for effective giving w/o overselling
Include advisors in annual meetings to learn about mission plus
educational updates re charitable planning
Educational
workshops
Active Philanthropy
Financial
Advisors
Concrete illustrations of donor success
Issue based information about community needs and how effective local
nonprofits are at addressing needs
32
Recent Charitable Trends
Opportunities
•Understanding the win-win
•Educating the Financial Advisor
•Serving as the expert resource for the advisors’ clients
1
Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf
2
McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”
33
Section Five
Continued Discussion